Stock Analysis

This Insider Has Just Sold Shares In WestRock Company (NYSE:WRK)

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NYSE:WRK
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We wouldn't blame WestRock Company (NYSE:WRK) shareholders if they were a little worried about the fact that Jeffrey Chalovich, the Chief Commercial Officer & President of Corrugated Packaging recently netted about US$1.0m selling shares at an average price of US$51.23. That's a big disposal, and it decreased their holding size by 14%, which is notable but not too bad.

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The Last 12 Months Of Insider Transactions At WestRock

In fact, the recent sale by Jeffrey Chalovich was the biggest sale of WestRock shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$51.07. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Jeffrey Chalovich ditched 33.23k shares over the year. The average price per share was US$48.08. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:WRK Insider Trading Volume March 16th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that WestRock insiders own 1.5% of the company, worth about US$203m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The WestRock Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing WestRock. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in WestRock.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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What are the risks and opportunities for WestRock?

WestRock Company, together with its subsidiaries, provides fiber-based paper and packaging solutions in North America, South America, Europe, Asia, and Australia.

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Rewards

  • Trading at 60% below our estimate of its fair value

  • Earnings are forecast to grow 6.1% per year

  • Earnings grew by 12.7% over the past year

Risks

  • Significant insider selling over the past 3 months

  • Large one-off items impacting financial results

  • Has a high level of debt

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